By Lauren Weber
In the waning hours of the Obama administration, the Labor
Department has filed suits against federal contractors Oracle Corp.
and J.P. Morgan Chase & Co. alleging that some employees
weren't paid fairly.
The 11th-hour actions seek to make good on the president's
promise to end wage gaps based on gender and race. The Office of
Federal Contract Compliance Programs, which filed the actions, has
had a mixed record on pay issues despite receiving millions of
additional dollars for an investigative push.
The suits come as Labor Secretary Tom Perez is set to hand the
reins over to a successor picked by President-elect Donald Trump.
Mr. Trump has nominated Andy Puzder, a fast-food chain chief
executive who has to date expressed little interest in fair-pay
issues.
On Wednesday, the compliance office filed separate suits with
the Labor Department's Office of Administrative Law Judges against
Oracle and J.P. Morgan, alleging that the firms had engaged in pay
discrimination.
The fates of these lawsuits are uncertain. A new labor secretary
could choose to withdraw the recent actions, settle them quickly or
pursue them apace. The Labor Department and the Trump transition
team declined to comment.
The agency said that since May 2012, J.P. Morgan paid at least
93 women who worked in a technology unit in its investment bank
less than men in the same positions. The complaint said the bank's
government contracts could be canceled if it doesn't provide
relief.
A J.P. Morgan spokeswoman said the bank tried to resolve the
Labor Department's concerns and was disappointed that it filed a
complaint. The matter has been progressing for a few years, people
familiar with the matter said, and J.P. Morgan attempted to rebut
the allegations late last year. The spokeswoman also said the bank
is committed to "diversity in the workplace," a matter bank CEO
James Dimon has been vocal about for years.
In the case of Oracle, the agency alleged the technology company
routinely pays its white male workers more than female and minority
counterparts in the same positions. The suit puts at risk hundreds
of millions of dollars in federal contracts Oracle has won.
The compliance office in 2014 began reviewing Oracle's equal
employment opportunity practices at its Redwood City, Calif.,
headquarters, and this week's suit alleges that the company has a
systemic practice of paying white male workers more, leading to
discrimination against female, African-American and Asian
employees.
It also alleges that Oracle has favored Asian workers in its
recruiting and hiring practices for product development and other
technical roles, resulting in discrimination against non-Asian
applicants.
An Oracle spokeswoman said the complaint is "politically
motivated, based on false allegations, and wholly without merit."
She added, "Oracle values diversity and inclusion, and is a
responsible equal opportunity and affirmative action employer."
Earlier this month, the compliance office sued Alphabet Inc.'s
Google, saying the technology firm had refused to comply with
requests to turn over compensation data that the agency uses to
determine whether contractors are complying with federal laws.
Google said Wednesday that it has provided hundreds of thousands
of records to the agency, but it won't release any confidential
data. "These requests include thousands of employees' private
contact information which we safeguard rigorously," the company
said in an email Wednesday.
Under President Barack Obama, the compliance office's budget
rose 40% from $81 million in 2008 to $113.6 million in 2016, with
pay discrimination named a top enforcement priority.
Priorities at government agencies typically shift when a new
administration takes over. President Bill Clinton pushed an
antitrust lawsuit against Microsoft Corp. in the 1990s; after
George W. Bush took office in 2001, his administration moved
quickly to settle it.
As CEO of CKE Restaurants Holdings Inc., parent of the Carl's
Jr. and Hardee's chains, Mr. Puzder last year told Business Insider
that he favored automating fast-food jobs in part because machines
are "always polite, they always upsell, they never take a vacation,
they never show up late, there's never a slip-and-fall, or an age,
sex, or race discrimination case."
By filing the wage suits before Mr. Obama's term expires, the
agency "is essentially locking in some effort and some resources,"
said Marc Bendick, a workplace-discrimination specialist who has
consulted for the compliance office.
Withdrawing the suits, he said, could be embarrassing for the
Trump administration if such a move looked like it was driven by
political considerations. Last month, Mr. Trump named Oracle co-CEO
Safra Catz to the executive committee of his transition team. In
September, the compliance office suedPalantir Technologies Inc. for
allegedly discriminating systematically against Asian job
applicants since at least January 2010. Palantir's co-founder is
billionaire investor and Trump adviser Peter Thiel. Palantir denied
the allegations at the time and has said it would defend
itself.
--Jay Greene and Emily Glazer contributed to this article.
Write to Lauren Weber at lauren.weber@wsj.com
(END) Dow Jones Newswires
January 18, 2017 19:36 ET (00:36 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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